Founded in 1884 as the National Cash Register Company, today NCR is one of the world's largest technology firms. The company, which reported 2009 revenues of $4.61 billion, recently unveiled its new approach to retailing, an amalgam of technology and ideology that it calls "c-tailing." Central to the concept is a fundamental shift in the ways retailers make operational decisions: a business-to-consumer (B2C) structure becomes C2B, where consumers dictate to the retailer how they want to interact. That philosophical shift sits atop a suite of products and services from NCR, comprised of technology like POS terminals, self-checkout, digital signage and e-commerce and marketing software. (More details can be found in this white paper.) We had the opportunity to talk with Mike Webster, NCR's senior vice president and general manager of retail and hospitality, about his vision for c-tailing, which he says will be his department's focus for the next three to five years. James Bickers: Give me the elevator pitch explanation of what c-tailing is. Mike Webster: C-tailing, first and foremost, stands for converged retailing. It represents the key strategy that NCR is going to be executing in the marketplace globally in the next three to five years. Simply, what it represents is really the natural evolution of retail. We've gone from a point where we enjoyed a very close, intimate relationship with a merchant, and then it involved into a world of mass retailing that has become, to a degree, depersonalized. And then we move into a phase where we have e-tailing, that many pundits projected was the end of in-store retailing. Converged retailing is the natural evolution of those. Underneath that, it recognizes two fundamental beliefs. The first is that we think that the business model has split, and that what has traditionally been a business to consumer world, where retailers create an experience that is then enjoyed by consumers, will flip, and it will become as NCR calls it, a C2B world, where consumers increasingly dictate the terms under which they are served by the retailers. We think that leads to the second fundamental belief, which is that consumers desire more highly personalized services, whether they are in grocery or general merchandise or food. Those are the core beliefs, and underneath those are a set of NCR technologies and services that help our customers to differentiate and improve their sales and drive a more cost-effective business model. JB: There's a lot of talk in retail about multichannel. How does c-tailing differ from what people are talking about when they say multichannel? MW: That's a great question, and I think that certainly the two share complementary elements. One of the big differences is that multichannel, to me, is exactly that – it stands for "multi." It means siloed channels. It does not imply an experience as a consumer that is seamless nor intuitive, and we could certainly give lots of examples of that. Buy online, pick up in-store is a great example of multi – there are many retailers that are separate companies. You buy online thinking you're buying from this company, show up at the store and they say, 'Oh sorry, you've got to return that through the mail.' That's a multichannel retailer. They sell online and they have brick and mortar. What c-tailing for us does, it says that those experiences have to converge and become more seamless. I need to be able to interact consistently with you out of store, near store, in store, using these NCR technologies and building blocks. JB: To go to that example of the company that is actually two companies and the customer doesn't see it: That's not a technology fix, is it? Isn't that an organizational problem? How do you work around that? MW: I think we work around it, again, by flipping the business model. If you think of C2B, we would allow that customer to declare a set of preferences and then we would be able to manage their presence – what channel are they on? Are they in my store, or on my website, or on my call center, or on a mobile device? We'll manage those attributes so that we can bridge that operational question in favor of a consumer experience that's much more compelling. JB: So this is really a philosophical discipline, more so than just a collection of technology pieces, it sounds like. MW: Absolutely. To us it is a combination of technology and services. We've got some global experts that are really going to help our retailers on the process side of converged channel management. It's a really key part of what NCR is bringing to the puzzle, this 125 years of domain knowledge about how consumers interact. We've been researching customers a lot. We know that a little more than two-thirds of consumers will switch between retailers to get a price discount. We know that 81 percent of North American consumers are more likely to choose a retailer that lets them shop across those channels, including social and smart phone. We know the percentage of consumers who want to use social networking in part of their retail journey. Those are all pieces of NCR's c-tailing vision. JB: Since you mention mobile, let's jump to this, because the smart phone market is only getting more complex. What's your approach to the mobile market from the standpoint of a technology company that has to make things work with a bunch of different devices? MW: Yeah, we would share the view that it's highly fragmented, particularly if you describe it as a North American view. You get to other parts of the view and you do have a higher degree of standardization. But the issues between carriers and handset manufacturers and banks and retailers and issuers and merchants is a very complex puzzle. Again, what we'll do is to look to the consumer to guide on how, when and where they'd like to interact using their mobile device. That's C2B thinking. We'll certainly have capabilities to communicate with things like barcodes and 2-D coupons and promotional messaging and all of those things that others are talking about. The difference is, we'll do it in a way that is driven by consumer preference and that it's converged with the environment in which they are operating. It's great if you want to send me a message for an item while I'm walking through the store. We'll argue about whether I want that or not separately. But they don't know if I'm walking down the aisle and they send me an offer for cat food … I may have a dog. They may be out of stock. In our converged view, we will triangulate all of those different positions. We'll know your profile and your preferences. We'll know the in-stock position of the merchandise, and therefore offer a more relevant offer as opposed to some canned B2C offer. JB: You mentioned a minute ago that you've been studying consumers a lot, doing a lot of research. We've come through an extraordinary couple of years, in terms of changes that consumers have had to make. What are some of the big changes that you've seen as far as consumer attitudes toward retailers? MW: Well, I think if we look at the profile, some things have not changed and are accelerating. All consumers are time-starved, and that's a big challenge. We know that they are more price-conscious. We know that they are more digitally enabled, so we know again that roughly two-thirds of those customers are using the Internet more frequently to research products and price before they make a purchase. I think we know a lot about them. I don't think it's completely the case to say that consumers have become more either conditioned to discounting or more distrusting of retailers. I don't think those are true statements. JB: One thing that I see a lot of disagreement about is the question, when times start to get better, will people keep their new frugal habits, or will they be so happy that things are getting better that they'll go back to their old spending and shopping habits? MW: You and I are reading many of the same pieces, I think, and there's no lack of academic research in the area as well, which I think is helpful. I think, as opposed to predicting the outcome of the spending line, I think what we're trying to focus on is, what is the consumer behavior and shopping profile that helps her to save time, that helps her to be more convenient. Whether she saves money, I'm going to leave that to her. That's what c-tailing is trying to do, is make her shopping experience something that is differentiated, something that is easier and something that is more personalized for her specific needs. Whether she spends more or less, there are all kinds of different demographic cuts that I would have to then profile. We would look at age, income, ethnicity, education level — there are seven or eight different traits that we're profiling.
This article first appeared on RetailCustomerExperience.com.
